Some clarification about what the government does with the 3 billion phone records it collects every day.

I'm not saying the first guest on today's "Fox News Sunday," Rand Paul, wasn't sharp and interesting, but I really appreciated the knowledge and calm expertise that General Michael Hayden, who headed the NSA and the CIA (under Bush), brought to the table. (The boldface is mine.)

CHRIS WALLACE: General Hayden, let's talk first of all about the general reaction you have to Senator Paul. I'm going to get into specific issues with you. As a man who used to run these programs, how important and how effective have they been in keeping us safe and how do you feel when you hear Senator Paul talk about class action lawsuits to the Supreme Court, new congressional restrictions?

GEN. MICHAEL HAYDEN, FORMER HEAD OF NSA AND CIA: Well, first of all, Chris, with regard to how effective they are, I think they're very effective. We had two presidents doing the same thing with regard to electronic surveillance. Now, that seems to me to suggest that these things do work. Now, with regard to what the senator said -- if I believed NSA was doing some of the things the senator fears they're doing, I would have been backstopping him during your first segment. He said we're trolling through millions of records. That's just simply not true. The government acquires records as business records from the telecom providers, but then doesn't go into that database without an arguable reason connected to terrorism to ask that database a question. If you don't have any link to that original predicate, terrorism, your phone records are never touched.

WALLACE: Well, let's get into that and let's talk a little bit -- and I know we're getting into kind of a sensitive area here about the tradecraft that you were involved with -- as especially the head of the NSA, but also the CIA. According to one estimate, the NSA is getting the phone records of 3 billion of our phone calls every day -- 3 billion phone calls every day. Two questions: one, how can you possibly process 3 billion records a day? And, secondly, why not just target, from the very beginning, the bad guys?

HAYDEN: Well -- well, first of all, you have to identify who are the bad guys. So, let's begin the acquisition. Three billions is a big number. Keep in mind, Chris, that our telecommunications providers do that every day on their own. So, it's not impossible to do. Now you've got the data stored. Here's the important part and this is the part that protects civil liberties and balances... security and our freedom.

You ask the database a question, but the question has to be related to terrorism. I'll give you a concrete example so this is very clear. So, you roll up something in Waziristan. You get a cell phone. It's the first time you've ever had that cell phone number. You know it's related to terrorism because of the pocket litter you've gotten in that operation. Here's how it works: you simply ask that database, hey, any of you phone numbers in there ever talked to this phone number in Waziristan? I mean, you're already going into the database with the predicate, with a probable cause, with an arguable reason why you're asking for the data.

WALLACE: I've been talking -- obviously, this has been the subject in Washington and across the country this week. People are concerned about this mountain of data that you have. OK. I mean, what you say sounds perfectly sensible. You know that there's a guy in Waziristan. You want to know who he's talking to in the United States. One, what do you do with all the records, the billions of records that you have on all of us law-abiding citizens and what's the potential for abuse with the fact that you have all of that stored in computers somewhere?

HAYDEN: First, to answer your question, what do we do with all of the other records? Nothing. All right?

WALLACE: You keep it, though.

HAYDEN: Of course, because -- I mean, you get the cell phone with that number six months from now you want to know the history of that number. When does the value of that information begin to age off? So, you do retain the information so that you can ask questions of it in the future. With regard to abuse, there are no records of abuse under President Bush, under President Obama.

Now, I was criticized because I theoretically didn't have enough oversight mechanisms, but no one accused us of abuse. President Obama has in some ways added incredible oversight mechanisms to this. Again, no abuse under either president.

WALLACE: ... Back in 2006, Senator Obama voted against your nomination to be CIA director because of your involvement in government programs. From what you know and I understand you've been on the outside, how much has he changed? He expanded, restricted these government surveillance programs that he inherited....

HAYDEN: Expanded in volume, changed the legal grounding for them a little bit, put it more under congressional authorization rather than the president's Article II powers and added a bit more oversight. But in terms of what NSA is doing, there is incredible continuity between the two presidents.

WALLACE: How do you mean he's expanded in volume?

HAYDEN: Well, it may just because we've gotten more of these records over time and with the amendment to the FISA Act in 2008, which Senator Obama finally voted for, NSA is actually empowered to do more things than I was empowered to do under President Bush's special authorization.

Now, obviously, there's worry about abuse, and the fact that we haven't seen "records of abuse" isn't that reassuring, especially when we're so aware of the abuse for political purposes within the IRS. That topic came up later in the show during the panel discussion:

WALLACE: Well, Bill, as someone who I suspect thinks that these surveillance programs are a necessary part of the war on terror, do you worry that all the leaks, all the disclosures this week are going to create some sort of backlash?

BILL KRISTOL, THE WEEKLY STANDARD: I do, particularly because they're coming into context of genuine abuses of government power, especially by the IRS. I think the big thing to remember is national security is different from internal management of the government. We're dealing with foreign terrorist threats here. And, secondly, apparently this program really does require court orders to go target particular individuals or groups. You can't just then migrate through the whole database and data mine and say this looks suspicious. You need to say this is a group in Waziristan. Let's see who they're talking to. And if they're talking to me, you then have to go back to the court and get an order for me. That is not what the IRS did, obviously. Lois Lerner on her own decided let's target people who have Tea Party in there...

WALLACE: But you would agree that when Rand Paul says what he says about, you know, let's have specific targeting and let's not just Hoover off, vacuum up all of this information on law-abiding citizens, that certainly has at least a political appeal.

KRISTOL: Maybe. But honestly, I think the concern is Republicans are making a huge mistake. A, I think it's mischaracterizing what's happening. They're getting a lot of data because they don't want to have to go to Verizon and AT&T and everyone else each time they get a phone number. But they're not allowed to go into that data until they have a particular warrant signed off on by a judge, with some cause to suspect a foreigner of terrorism -- that is totally different from the IRS abuses, which I think are very serious. And I think it's very important for conservatives and Republicans to make that distinction....